Paxos Standard is fully secured in your bank account at 1: 1 in US dollars. In short, all Paxos (PAX) supplies are backed by Paxos' spare fiats. Due to PAX purchase and redemption requirements, cash will be sent in and out of the reserve, the Supply Controller’s address will be stamped, and tokens will be written accordingly. For example, if you buy $ 100, you will be issued 100 PAX tokens and $ 100 will be deposited in your reserve. On the other hand, if you redeem 100 PAX tokens, those 100 tokens will be destroyed and $ 100 will be deducted from your reserve. This is given to the redeemer. As a way out of a serious security threat, Paxos may suspend the transfer and authorization of PAX tokens through the OpenZeppelin contract.
Tokens are created and deleted via Paxos, while other transactions follow ERC-20 smart contracts. This ensures PAX security by eliminating the need for third parties and instead relying on a proven global blockchain network. In addition, PAX display and transfer is automatically supported by most Ethereum-supported exchanges and wallet applications, making it easy to trade tokens with PAX.
Under the Trust Charter, the New York State Department of Financial Services regulates and oversees companies and their operating procedures to ensure compliance with New York's banking law. These banking laws also require PAX to have the authority to freeze accounts and remove funds from those frozen accounts. PAX has a function called “setLawEnforcementRole.” As the name implies, you can grant administrator privileges to a circular PAX supply. Paxos warrants that this feature is designed to prevent illegal activities such as money laundering and terrorist financing and will not be used unless required by law.
The Paxos Standard Smart Contract has been reviewed by Nomic Labs to ensure that the contract works and is advertised as intended, and the PAXER C20 contract code is available for technical reviews on Github. In addition, Withum, one of the top 25 accounting firms nationwide, confirms that dollar deposits are checked monthly against unpaid PAX tokens for greater transparency.
Use of Native tokens in the ecosystem:
USDP is used to store and send money or access crypto markets. An alternative to unregulated or unstable offerings that digital-asset custodians and exchanges can provide to market participations.